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CCFI Commentary Issue 38, 2016

  Demand Expanded and Rate grew

  In the week ending Oct.14, China export box transport market was on the recovery period after Chinese National Holiday, and most box liners tried to hike freight rate, which spurred the whole market rebounding. On Oct.14, Shanghai (Export) Containerized Freight Index (CCFI) issued by Shanghai Shipping Exchange rose by 9.8% from one week ago to 776.93 points.

  Data from European Economy Institute showed that European economy had a nice performance, and transport demand in the Europe route was encouraged. As the Chinese National Day, cargo volume slipped, but as box liners reinforced capacity limit measures, demand/supply condition kept stable and the average slot utilization rate stood around 85%. Some box liners tried to push up freight rate. On Oct.14, freight rate in the route from Shanghai to Europe route (covering seaborne surcharges) quoted USD755/TEU, up by 8.0% from last week. Impacted by the crisis of Italian bank, countries in the South Europe saw economy weak, which dragged down transport demand in the Mediterranean route. Cargo volume decreased slightly, and the average slot utilization rate fell to around 70%. Spot rate slipped continuously. On Oct.14, freight rate in the Shanghai to Mediterranean route (covering seaborne surcharges) had a week-on-week decrease of 3.1% to USD565/TEU.

  According to data from the Institute for Supply Management, U.S. economy showed on the stable recovery trend, boosting transport demand growth in the North America route. After the bankrupt of Hanjin Shipping, some box liners added capacity input, which improved the market, where demand/supply condition began to firm after shaking. The average slot utilization rate remained above 90%, with some beyond 95%. Spot rate continued to rise. On Oct.14, freight rate in the services from Shanghai to USWC and USEC (covering seaborne surcharges) quoted USD1914/FEU and USD2563/FEU, growing by 13.5% and 6.1% from one week ago respectively.

  In the Persian Gulf route, transport demand had a marginal increase. Owing to some box liners carried out stiffened capacity limit measures, demand/supply condition had some improvement, and the average slot utilization rate rebounded to above 80%. Spot rate rebounded. On Oct.14, freight rate in the Shanghai-Persian Gulf route (covering seaborne surcharges) had a week-on-week increase of 13.2% to USD420/TEU.

  In the Australia route, as the shipment pace recovered after the Chinese National Day, transport demand rose, plus part of box liners continued to limit capacity, demand/supply condition improved, and the average slot utilization rate kept above 90%, with some even full-loaded. Spot rate surged. On Oct.14, freight rate in the Shanghai-Australia/New Zealand (covering seaborne surcharges) quoted USD833/TEU, a large increase of 61.4% from one week ago.

  In the South America route, transport demand firmed after slip, some route still ceased after the Chinese National Holiday, therefore, demand/supply condition improved and the average slot utilization rate rebounded between 85%-90%. Some box liners pushed up freight rate, spot rate rebounded. On Oct.14, freight rate in the Shanghai-South America route (covering seaborne surcharges) quoted USD2239/TEU, surging by 56.9% compared with one week ago.

  Cargo volume declined in the Japan route, where spot rate kept stable. On Oct.14, freight index in the China-Japan route quoted 635.17points, down by 2.4% against one week ago.

 
 
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